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Webcasting royalty proposal rejected

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The Library of Congress rejected an arbitration panel's proposal for royalties to be paid per stream on webcasted material. Both webcasters and music corporation officials applauded the decision even though neither side knows exactly why the royalty proposal was rejected. When negotiations between the recording industry and webcasters (such as AOL and RealNetworks) broke down, an arbitration panel was created to form royalty recommendations. In February the panel submitted their pay per stream proposal which immediately drew criticism from both sides. The RIAA believed the royalty rates to be too low, while the webcasters were pushing a plan based on a percentage of revenue model (used currently with traditional radio broadcasting).

Caught in the middle are small webcasters who banded together to lobby in Washington claiming the royalty rates proposed would put them out of business. It is unclear if their lobbying efforts were successful or not. Since no official explanation was given for the rejection, neither side is sure what side the Library of Congress is leaning towards. They have 30 days to make a decision, but they are limited to studying the proceedings involving the RIAA and large webcasting companies. Other than future days of silence and lobbying efforts in Congress, small webcasters may have little say in this final decision.